FOREIGN-EXCHANGE CONSTRAINTS AND DEVELOPING-COUNTRIES

This paper presents a model of developing countries in which a foreign exchange constraint and imported intermediates are central features, The model is used to carry out different scenarios with respect to dev eloping countries' economic performance in the 1990s, A baseline simul ation shows that the real annual growth rate of per capita GDP for sub -Saharan Africa is zero or even negative during the 1990s; for the Asi an and Latin American countries it will exceed 2.5%, Alternative scena rios assess the effects on developing countries' economic growth of hi gher economic growth in the industrial countries, an increase in total factor productivity growth in industrial countries, and an increase i n ODA donations.